Shares of Senco Gold, a prominent jewelry retailer operating across India, have surged to the 5% upper circuit limit for a second consecutive day, reaching a five-week high of ₹318.25 per share on April 9. This impressive rise follows the company’s recent business update for the fourth quarter of FY25 and the entire fiscal year, showcasing robust growth metrics that have captivated investors.
Strong Financial Performance
In the latest quarter, Senco Gold reported a remarkable 19.1% increase in total revenue, alongside a 23% jump in retail sales. For the complete fiscal year, the company’s revenue growth was recorded at 19.4% year-on-year. Notably, their same-store sales growth (SSSG) was 18.4% in Q4 and 14.6% for FY25, indicating a healthy demand for its offerings.
- Q4 Revenue Growth: 19.1%
- Retail Growth: 23%
- SSSG: 18.4% (Q4), 14.6% (FY25)
Demand from Smaller Towns
Interestingly, Senco Gold has seen significant demand from Tier 3 and Tier 4 towns, which outpaced growth in larger metropolitan and Tier 2 cities. This trend continues even amid rising gold prices, which surged 11% quarter-on-quarter and 33% year-on-year, peaking at an all-time high of US$3,150 per ounce.
The sustained interest in gold as a safe investment has been bolstered by ongoing purchases from central banks, keeping demand high and prices elevated.
Expansion and New Showrooms
Senco Gold is not just resting on its laurels; the company is actively expanding its footprint. In the March quarter alone, it launched four new showrooms under both franchisee and company-owned models. Over FY25, Senco opened a total of 15 new showrooms, including six franchise outlets, bringing its total to 175 locations, which also includes a showroom in Dubai.
- Total Showrooms: 175
- Franchise Outlets: 72
- Showroom in Dubai: 1
Margin Adjustments and Future Outlook
The company acknowledged that the reduction in customs duties during Q2 and Q3 impacted their margins by 80-90 basis points, resulting in a 6.2% adjusted EBITDA margin. However, Senco expressed optimism for Q4, attributing potential margin improvements to strong sales of diamond jewelry.
"The full effects of the customs duty cut have already been accounted for through Q3FY25, and we do not anticipate any additional factors to affect gross margins in Q4FY25," a company spokesperson stated.
Promising Future for FY26
Looking ahead, Senco Gold is poised for a robust start to FY26, fueled by anticipated demand during upcoming festivals like Poila Baisakh and Akshaya Tritiya, as well as the ongoing wedding season. The company aims to open 5-7 new stores as part of its broader strategy to launch 20-22 new outlets in FY26, which includes both owned and franchisee-operated locations.
Additionally, Senco plans to enhance its reach through the Shop-in-Shop (SIS) model, targeting 70 new SIS outlets, which would elevate their total to around 100 by March 2026. Their subsidiary, Sennes Fashion Limited, is also set to introduce 5-7 new SENNES stores, focusing on lifestyle products, including lab-grown diamonds and leather accessories.
As Senco Gold continues to expand and innovate, investors are keenly watching to see how these strategies will unfold in the evolving jewelry market landscape.
